Carter sees a decrease in profitability, while sales rise by 3.7 % in the second quarter of 2025

Carter’s Company’s Carter’s in North America announced an increase of 3.7 % in net sales to $ 585.3 million for the second quarter (Q2) of the fiscal year 2025, an increase of 564.4 million dollars during the same period from 2024.

The increase was primarily due to sales gains in the international retail sectors and the United States, which increased by 14.1 % and 3.2 %, respectively.

The net sales in the wholesale sector in the United States remained stable compared to the previous year, as net retrospective sales in the United States increased by 2.2 %.

Foreign exchange rate fluctuations negatively affect the net standard sales of $ 3.1 million or 0.5 %.

“The performance of our sales in the second quarter showed stability and momentum, especially in our direct work of consumers, which has achieved similar growth in sales in the United States, Canada and Mexico.

The operating income witnessed a significant decrease of 35.4 million dollars, as it decreased by 89.7 % to 4 million dollars from 39.5 million dollars in the second quarter of the fiscal year 2024.

The operating margin decreased sharply to 0.7 % from the previous year number of 7 %, due to investments in pricing strategies, store renovations and openings, costs related to operational improvements and driving changes, and increasing performance -based compensation.

The net income reached 0.4 million dollars or $ 0.01 per diluted share, and it is a blatant contrast with $ 27.6 million or $ 0.76 for each diluted share registered in the second quarter of the fiscal year 2024.

“I am disappointed, however, in the decrease in our profit in the quarter in the quarter, and partially affected the selective investments in prices, new stores and more normalized levels than performance -based compensation. We have also started to see some of the joyful effects of this total, and we believe that this is superior to reporting that, and we believe that this exceeds that, and we influence this Report it.

Carter monitors the potential new customs tariffs proposed by the US government, which can greatly affect imports, which greatly adds to $ 110 million in duties on imported products paid by the company in the fiscal year 2024.

It is estimated that additional import duties can affect the total pre -tax profit of $ 125 million and 150 million dollars annually, according to a scenario with a specific basic tariff at different rates of different countries: 30 % for China, 20 % for Vietnam, 19 % for Indonesia and 10 % for other countries.